What do you think is the difference between a debit card and a credit card? So if you have any such question in your mind about debit and credit card, then today you will get the answer to all the questions in your mind about debit and credit card. You also know that we can do online shopping with debit card and credit card and also withdraw money from ATM. But there are also advantages and disadvantages to shopping online with a credit card and withdrawing money from an ATM. Today we will know all these credit card and debit cards in this post.
What is a debit card
In the present era, the use of debit card is increasing day by day. The current debit card is very easy to use. Money held in a bank account can be transacted using a debit card. But if there is not enough money in the account, money transaction cannot be done from debit card.
Debit card is associated with a savings or current account. Debit cards are mainly issued by banks. Debit cards can be used to purchase a variety of services or products. Money in another person's account can be transferred. Easy to shop online and offline with debit card.
What is a credit card
Credit cards usually provide the cardholder with the convenience of spending money. Many banks and financial institutions now offer credit card services. A credit card is a chip-based plastic card. The function of the credit card is to facilitate the rest of the transactions of the users.
Credit cards account for transactions separately and use credit cards as balances or loans. Credit cards basically contain the cardholder's name, credit card number, expiration date, cardholder's signature, and customer care center details. Credit card transactions involve a certain amount of money transactions. One month's credit card bill is paid at any time during the following month. And if you don't pay the bill, you can't use it again.
Bank's relationship with debit card and credit card
The use of debit cards and credit cards is on the rise. Debit cards look similar to credit cards, but debit and credit card functions are not the same. Debit and credit card policies and accounting are different. Debit cards and credit cards are related to the bank. Because thinking through the bank, it is found that if a person withdraws or spends money from the bank account, then it is considered as debit by the bank.
On the other hand, if you have taken a loan from a bank account, then it is a credit account. The customer spends his money through debit card. Credit card loans can be taken and repaid. The 16-digit debit or credit card contains a confidential card number, expiration date, cardholder's signature, and customer service phone number.
Although debit cards and credit cards look alike, there are some differences. Here are the differences between a debit card and a credit card:
1. Debit cards are mainly issued by banks. Debit cards are mainly related to savings accounts or current accounts.
2. Debit cards only allow the use of money saved in savings or current accounts. Credit card holders, on the other hand, can use money up to a pre-approved credit limit.
3. Some banks pay interest on the money deposited in the debit card customer's account which is added to the balance. On the other hand, in case of delay in payment of bills, the owner of the credit card has to pay interest.
4. Money is used as required from a current or savings bank account via debit card. The credit card issuer is temporarily reimbursed by the credit card issuer.
5. Loans are not given through debit card so no extra payment is required. But if you don't pay on time like credit card, you have to pay with extra money.
6. To continue using the debit card you have to pay maintenance free or a financial maintenance fee. There are also fees for using a credit card and there are penalties for delays.
7. There are not many facilities available in debit card. On the other hand, there are various facilities available in credit card.
8. Debit card users do not have to pay any monthly statement. But you have to pay a monthly statement for the credit card.
Finally, the debit card can be used to make transactions while there is money in the account. And the credit card money is borrowed from the bank due to which if you can't repay the money within the stipulated time, you have to pay with interest and penalty.
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